All Forum Posts by: Jason Ray Richardson

It is not a passive investment in the truest sense of the phrase. Usually the off market deals are in bad shape and can be capital intensive to bring them back up to date. Depending on the size, probably your best bet is either seller financing or bank/credit union financing. 

Have you already run some preliminary numbers on the parks NOI that you can show the bank? It has been my experience that even when things change (they will change in due diligence because sellers always "forget" some expense or another) that if the bank sees that you are going into the deal with eyes wide open that they are more likely to do the loan (all things being equal) because you give them confidence that you know what you are talking about. Just my 2 cents worth. Good luck!

So do you have any tenants currently?

Is this still available?

Investment Info:

Single-family residence buy & hold investment in Brookhaven.

Purchase price: $75,000
Cash invested: $125,000

This house was up the street my current home and had been on the market for over a year. It was totally dated and most of the rooms were ate up by termites. I wanted to purchase it as a fix and flip however when I walked my wife through the house I did too good of a sales job on what the house could look like. So she ended up wanting to move in. After a total rehab on flooring throughout the house, rewiring, new air units, repainting the outside.

What made you interested in investing in this type of deal?

I know the houses in the area having grown up here and could see the potential in the deal.

How did you find this deal and how did you negotiate it?

It was listed with a realtor for over a year. I offered less than half what they had it listed it for and they came back with a counter offer which we went with.

How did you finance this deal?

1 year adjustable rate loan with a local bank.

How did you add value to the deal?

I knew the potential value of the house because of it's size and location. Reworked the rooms during rehab to better use the size of the house.

What was the outcome?

The house is worth over 290,000 which left me enough money to cash out some equity and buy some more property (which was part my wife and I's compromise.

Lessons learned? Challenges?

I way under budgeted on this house, fortunately it was such a good deal that I was still ok. Keeping my contractors motivated. I went through several while on this project.

Investment Info:

Single-family residence buy & hold investment in Brookhaven.

Purchase price: $75,000
Cash invested: $125,000

This house was up the street my current home and had been on the market for over a year. It was totally dated and most of the rooms were ate up by termites. I wanted to purchase it as a fix and flip however when I walked my wife through the house I did too good of a sales job on what the house could look like. So she ended up wanting to move in. After a total rehab on flooring throughout the house, rewiring, new air units, repainting the outside. The house is worth over 290,000 which left me enough money to cash out some equity and buy some more property (which was part my wife and I's compromise. I would have added more pictures but I think the limit is 6.

What made you interested in investing in this type of deal?

I know the houses in the area having grown up here and could see the potential in the deal.

How did you find this deal and how did you negotiate it?

It was listed with a realtor for over a year. I offered less than half what they had it listed it for and they came back with a counter offer which we went with.

How did you finance this deal?

1 year adjustable rate loan with a local bank.

How did you add value to the deal?

I knew the potential value of the house because of it's size and location. Reworked the rooms during rehab to better use the size of the house.

What was the outcome?

I live here now and with the extra equity created I bought another deal.

Lessons learned? Challenges?

I way under budgeted on this house, fortunately it was such a good deal that I was still ok. Keeping my contractors motivated. I went through several while on this project.

Did you have an idea of what you would be asking for it? It would be easier to sell it if you were to sell the homes and just collect lot rent like you mentioned. 

You'd need to talk to some banks in your area that you will try to use to refinance and see how they view it. Many banks it would be a no go because of the size of the park and they don't want to loan on the homes themselves. If you have relationships with banks in the area that you could potentially sale on the value that you will be bringing maybe it will work.

Option 2. I think "technically" you can't charge interest if you are not a bank. However you can charge a higher amount and divide that over how many months they will be paying you. Part of their rent is a credit that goes back to what they owe. It is also easier to keep up this way for you and the tenant because you don't have to keep up with amortization schedules or early payoffs.

Yes definitely been there before, almost climbing out it myself just now. Like others have stated just hang in there it's just a phase that happens and you have to work through it. Focus on your why (why are you building a rental portfolio?) and that should help. There are a lot of low interest lines out there on credit cards or check out your local credit union.